Clandestine removal demand sustained on seized records, stock shortages, and corroborating evidence despite cross-examination objections.

CESTAT New Delhi sustained a clandestine removal demand where seized documents from the appellant and a third party, along with shortages of finished goods and raw materials found during search, corroborated unaccounted clearances. The Tribunal held that the assessee's objection based on the witness not attending cross-examination did not defeat the demand when the case was independently supported by recovered records and adverse material from the appellant's premises. It also found that the cited decisions did not assist the appellants on the facts. The demand and penalties were therefore upheld and the appeals failed.

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Issues: Whether the demand of central excise duty and penalties for clandestine removal was sustainable on the basis of seized documents, shortages found during search, and statements of persons connected with the transactions.

Analysis: The Tribunal found that incriminating records were recovered from the appellant's premises and from a third party, and that these records, together with the shortage of finished goods and raw materials noticed during search, supported the allegation of unaccounted clearances. The refusal of the witness to attend cross-examination did not dislodge the case when the demand was supported by the seized materials and the appellant's own premises yielded adverse evidence. The Tribunal also held that the cited decisions did not assist the appellants on the facts of the case.

Conclusion: The allegation of clandestine removal was upheld and the demand and penalties were sustained against the assessee.

Final Conclusion: The appeals failed and the impugned order was affirmed in full.

Ratio Decidendi: Where seized documents and stock shortages provide corroboration for unaccounted clearances, the demand for clandestine removal can be sustained despite objections based on retraction or non-availability of cross-examination.

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